Direct Line rejects supply value greater than £3bn from Belgian rival
Direct Line has rejected a proposal value greater than £3billion from a Belgian rival because it grew to become the most recent London-listed firm to be focused by overseas predators.
The insurance coverage large, which owns manufacturers together with Churchill, Green Flag and Privilege, mentioned that it has snubbed a 233p per share supply from Ageas.
Direct Line mentioned that the proposal, which was value £3.1billion, was ‘unattractive’ and ‘uncertain’, and undervalued the corporate.
It got here simply hours after Ageas confirmed it had tabled a proposal for the FSTE 250 firm and believed a tie-up could be useful for shareholders.
Yesterday, shares in Direct Line jumped by 23.8 per cent, or 38.85p, to shut at 202.2p.
Target: Direct Line, which owns manufacturers together with Churchill, Green Flag and Privilege, mentioned that it has snubbed a 233p per share supply from Aegas
A profitable swoop by Ageas would add Direct Line to the rising listing of UK insurers to be snapped up by overseas patrons lately.
In 2020, a consortium that was headed by the Toronto-based Intact acquired the British insurer RSA.
One yr later Finnish insurer Sampo purchased dwelling and motor insurer Hastings. And past the world of insurance coverage, there are different overseas patrons trying to swoop on corporations in Britain.
Electrical retailer Currys is at the moment on the centre of a overseas bidding warfare between the US hedge fund Elliott Advisors and the Chinese on-line retail large JD.com.
Wincanton, the UK’s final listed street haulage group, can also be in the midst of a battle between French and American suitors.
Direct Line is likely one of the UK’s best-known insurance coverage manufacturers and was based by entrepreneur Peter Wood in 1985.
It shot to notoriety within the Eighties due to its TV adverts that includes its small crimson phone on wheels. It was owned by NatWest for some time and was spun out onto the inventory market in 2012.
Yet the enterprise has fallen on powerful occasions following the pandemic and has struggled within the face of excessive inflation, finally driving up the prices of claims.
This backdrop prompted its former boss Penny James to step down in January final yr shortly after the insurer warned on earnings and scrapped its dividend.
Ex-Aviva boss Adam Winslow will tackle the function because the agency’s new chief government tomorrow.
The board mentioned yesterday Winslow would refresh the group’s technique and it was assured of the corporate’s prospects as a stand-alone entity.
Analysts at Panmure Gordon mentioned: ‘Ageas will need to revise its offer with a higher price or larger cash component, or both, to convince the Direct Line board and shareholders.’
Ageas has 44,000 workers in 13 nations. Its UK enterprise is the sixth-largest in automotive and residential insurance coverage.
